Psychologists have confirmed what retailers and real estate agents have known for some time. Buyers of everything from sweaters to gasoline to homes are susceptible to a phenomenon known as the Left Most Digit Effect.
Studies have shown that buyers are so heavily influenced by the left most digit in the listing price of a product that they perceive a real and material difference between two numbers that are almost identical. For instance, most people would say that a $2 can of soda is essentially the same as a soda being sold for $1.99.
However, for most of us, our brains do not take the time to make the rational conclusion that these two sodas are for all intents and purposes the same price. Instead, our brains quickly process these two items as being distinctly priced and quite different from one another.
While there is little risk in pricing your soda cans this way, there is a huge risk when it comes to pricing your home for sale. Instead of making a few cents more or less, in most cases when you are selling your home, the risk of not taking the Left Most Digit Effect into account can cost you thousands of dollars. Moreover, it can make the difference between selling your home within a week or taking 90 days or more to sell.
Because of our unique Flat Fee program, we are able to help sellers ensure that they can utilize the Left Most Digit Effect in their pricing. Most firms charge a 6% commission. In contrast, we charge a Flat Fee of $3,500. Instead of increasing your price from $299,000 to $305,000 or from $399,000 to $409,000 in order to pay your agent's fees, you can incorporate the savings you will get from our Flat Fee program into the pricing. You can keep that "Left Most Digit" below those important psychological thresholds and sell your home more quickly.